Nvidia CEO on the possible AMD acquisition of ATI

[nv55]

http://www.tinyurl.com/g6y6k

.....................................................................................................


Forbes.com: "There was a recent rumor that Advanced Micro Devices
would buy your competitor, ATI Technologies, a company that had sales
of $2.2 billion last year but a profit of only $16.9 million. That deal
has yet to materialize. But do you see other consolidation down the
line?"


Jen-Hsun Huang: "It's hard to say whether the rumor is true or not, but
there are some things here that are logical and there are some things
that are not. It's hard to invest multiple hundreds of millions of
dollars per generation when you don't generate multiple hundreds of
millions of dollars of profit for that particular product line. Over
time, I think it becomes increasingly difficult to sustain innovation
at that level.

On the other hand, AMD's strategy as an alternative to Intel is to be
the open ecosystem [and] to partner with all of the leaders in the
marketplace, whereas Intel has a closed strategy with Centrino and Viiv
[which use only Intel products]. If AMD decides to [buy ATI], it closes
the system pretty dramatically. Following a giant with a giant's
strategy is not always the most clever thing."
.....................................................................................................

 

[John Lewis]

http://www.tinyurl.com/g6y6k

....................................................................................................


Forbes.com: "There was a recent rumor that Advanced Micro Devices
would buy your competitor, ATI Technologies, a company that had sales
of $2.2 billion last year but a profit of only $16.9 million. That deal
has yet to materialize. But do you see other consolidation down the
line?"


Jen-Hsun Huang: "It's hard to say whether the rumor is true or not, but
there are some things here that are logical and there are some things
that are not. It's hard to invest multiple hundreds of millions of
dollars per generation when you don't generate multiple hundreds of
millions of dollars of profit for that particular product line. Over
time, I think it becomes increasingly difficult to sustain innovation
at that level.

On the other hand, AMD's strategy as an alternative to Intel is to be
the open ecosystem [and] to partner with all of the leaders in the
marketplace, whereas Intel has a closed strategy with Centrino and Viiv
[which use only Intel products]. If AMD decides to [buy ATI], it closes
the system pretty dramatically. Following a giant with a giant's
strategy is not always the most clever thing."
....................................................................................................

On the money. And BTW the giant is currently agonizing over its
strategy. See next paragraph.

AMD is not stupid enough to buy ATi for many, many reasons. The
biggest reason is "focus on your core business". Just look
at Intel today. They have too many staff, having diluted their focus
with lots of peripheral ventures and AMD has forced them to realise
this huge mistake. Intel is now rapidly spinning off unwanted
businesses -- another $500million one today -- and proposing the
layoff of up to 10,000 staff as well (Total workforce ~100,000)
Hiring has been frozen and Intel is streamlining their internal
management as well.

And the second reason is "Don't kill the goose that (helps you).
lay(s) those golden eggs" AMD depends on BOTH ATi and
nVidia for SUFFICIENT VOLUME of chip-sets to support their
processors. An AMD purchase of ATi is very likely to screw up
the future supply of chip-sets by pi**ing-off nVidia, potentially
cutting off AMD processors from SLI rigs. Remember that nVidia
has now got a full line of Core2 Intel-compatible chipsets for SLI.
In fact the latest nVidia desktop chipset will support ALL Intel
processors from Celeron D right through Conroe.
Since AMD has a very firm base in the enthusiast community then
an ATi acquisition, potentially damaging the availability of the SLI
variety of AM2 motherboard, seems like a fatal throat-cutting
exercise.

With Conroe (and other Core2 processors) coming and AMD's 65nm process
not in full production yet, the next 6-9 months is going to be the
toughest for AMD in the past 2-3 years. Distracting exercises like any
acquisition of ATi will be a formula for suicide.

John Lewis

 

[chrisv]

Remember that nVidia
has now got a full line of Core2 Intel-compatible chipsets for SLI.
In fact the latest nVidia desktop chipset will support ALL Intel
processors from Celeron D right through Conroe.

That's available now? What's it called?